Humber/Ontario Real Estate Course 3 Exam Practice

Which of the following is true about the use of a comparative market analysis (CMA) by a salesperson?

1. A CMA includes comparable properties for sale, but not expired listings.

2. Only listing services are used for information, not other sources.

3. The CMA helps recommend the maximum listing price.

4. Appraisers also use CMAs to estimate property value.

5. The CMA excludes properties sold within the last year.

6. CMA results are always shared with prospective buyers.

The correct answer is: The CMA helps recommend the maximum listing price.

The statement regarding the CMA helping recommend the maximum listing price is true because the CMA evaluates various comparable properties to assess how much similar homes have sold for in a given area. By analyzing factors such as property size, location, conditions, and recent sale prices of these comparables, a salesperson can provide a well-informed recommendation for the maximum listing price. This makes the CMA a crucial tool in setting realistic and competitive pricing strategies that can attract potential buyers while ensuring the seller receives a fair market value for their property. The other options do not accurately reflect the purpose or scope of a CMA. For instance, expired listings can provide insights into the market and are typically included to understand pricing trends. Multiple sources of information, including local sales data and market trends, are commonly used to create a comprehensive CMA, not just listing services. Appraisers do utilize CMAs, but it is distinct from the primary purpose tied to pricing recommendations in sales contexts. Lastly, sharing CMA results with prospective buyers is not always a standard practice, as it can depend on the agent's strategy, the nature of the market, and privacy considerations. Therefore, the recommendation of the maximum listing price stands out as the most precise description of the benefit of a CMA for a salesperson.